Management by values (MBV or Value Based Management) ​​creates the framework for today's leaders and managers. MBV method is important in the management of organizations in a complex environment. The issue of company values was ​​previously considered "too soft" to be turned into a serious approach to management, now it turned into a central part in discussions about strategy and organizational changes. Focusing on the core values (key, most important values) ​​has become necessary to carry out organizational change.

The values ​​should be the focus on issues related to organizational change, as well as in the whole practice of management. In some of the world's emerging economies, management by values is quickly becoming a major force for the rebuilding of sustainable and competitive culture.

Practice of managing by values

Managing by values can be defined as both a philosophy and practice of management, it focuses on the key values ​​of the organization and their consistency with the objectives.

Scientific studies have confirmed that the key to understanding the behaviour of complex systems is to understand the values ​​that each of them contains. System values ​​are motivators that shape the behaviour of individuals, organizations and society.

Management by values ​​for the employees involves working with the process of meeting the needs and their dignity at the same time. The company forms self-control teams and personal self-control environment. It raises the quality of work and increases the identification and loyalty to the company.

Axes of management by values theory

Economic and pragmatic values ​​are necessary to maintain and connect variety of organizational subsystems.These relate to: performance, performance standards and discipline. These values ​​have an impact on activities such as planning, ensuring quality and accounting.

Ethical and social values common to all employees determine how people behave in groups. This is related to human behaviour, including relationships and social values ​​such as honesty, respect, integrity and loyalty.

Emotional and development values are the basis for creating new opportunities for action. These are related to: freedom, happiness and confidence. Examples of such values ​​are creativity, creating of concepts, life, self-awareness, self-confidence, influence, adaptability, flexibility.

Three-axis model of value-based management focuses on finding the key organizational values. It offers a chance to build a culture in harmony with these values ​​and strategic objectives.

Managing of core values today

Since the 90s the importance of economic and pragmatic values ​​decreased, while the importance of ethical values ​​has increased considerably. Moreover, among professionals, especially in the growing service sector, there can be seen more emphasis on the values ​​associated with the development and emotions. These values ​​are still critical elements to attract and retain top-class professionals, as employees are better educated, more mobile and require immediate satisfaction. Today the trust, rather than control, becomes increasingly important in the workplace.

Today organizations are becoming increasingly global, diverse, flat, and flexible. Managers must thus realize the importance of understanding and managing the value of the teams, departments and cross-organizational units. Leaders must develop the ability to manage complexity, and this includes understanding and using core values ​​at the organization and individual level. Values are also important part of the extended enterprise model of company development.